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The Affordable Care Act will establish an annual comparative effectiveness fee to fund research comparing the effectiveness, benefits, and potential risks of different treatment options. The fee first goes into effect in plan or policy years ending during fiscal year 2013 (Oct. 1, 2012 through Sept. 30, 2013). As a result, the fee first applies for plan or policy years that begin on or after Oct. 2, 2011. The fee terminates at the end of fiscal 2019.

For insured coverage, the health insurance issuer pays the fee. For self-funded customers, the plan sponsor (usually the employer) pays this fee.

The dollar amount of the fee will vary depending on the fiscal year in which a plan or policy year ends.

For plan or policy years ending in fiscal 2013, the fee will be equal to $1 multiplied by the average number of covered lives.

For plan or policy years ending in fiscal 2014, the fee will be $2 per average number of covered lives.

For fiscal years 2015 through 2019, the $2 fee is indexed to the growth in national health spending as measured by the Centers for Medicare and Medicaid Services’ per-capita National Health Expenditure data. In current law, this fee terminates at the end of fiscal 2019.

It is not yet clear when the Internal Revenue Service will first assess insurers and plan sponsors for the amount owed, or when payments will be due to the IRS.

Exceptions from this fee include the following types of health coverage: Medicare, Medicaid, State Children’s Health Insurance Program, TRICARE and other military coverage, Indian tribe medical care programs, and excepted benefits (including stand-alone dental and vision, Medigap, and several other types of benefits).

The information on this website is based on BCBSM's review of the national health care reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services. Additionally, some reform regulations may differ for particular members enrolled in certain programs such as the Federal Employee Program, and those members are encouraged to consult with their benefit administrators for specific details.